Overview
Several large Wall Street banks are organizing a last push to pare back parts of the Federal Reserve’s reworked capital rule proposal, industry officials said, seeking changes before a public feedback deadline next month. The campaign centers on capital treatment for unused credit lines and on the methodology used to size a surcharge for globally systemically important U.S. banks - known as GSIBs - among other technical points.
What banks are contesting
In March the Fed released a softer draft of sweeping capital reforms that the central bank estimates would lower the amount big banks must set aside for potential losses by roughly 4.8%. While many in the industry view that outcome as an improvement compared with an earlier 2023 proposal that had envisaged an approximately 20% increase in capital requirements, the benefits will be uneven and a subset of the largest lenders believes it will be disadvantaged relative to peers.
One prominent flashpoint is a provision drawn from international Basel guidance that would require banks to hold capital against 10% of certain unused credit commitments labeled "unconditionally cancelable commitments" - the most common example being unused credit card lines. Under current U.S. rules, such unused lines generally attract no capital requirement on the presumption that banks can cancel them at will. Regulators counter that in practice lenders may be reluctant to pull lines during stress periods because of customer relationships and other considerations.
The Fed also included in its March proposal a capital relief for used credit lines, but industry officials warn the new charge on a portion of unused lines could prompt banks to trim card limits or cancel unused facilities. Regional and smaller banks would largely escape that new charge because the Fed proposes to place them under a simpler capital framework, two of the industry officials said.
"The rational thing to do is cut credit limits closer to approximate usage," said Matthew Bisanz, a partner at Mayer Brown who is tracking the proposal closely, and he added the amount of unused credit potentially affected would be "enormous." Spokespeople for the Fed, JPMorgan, Wells Fargo, Citi and Bank of America either declined to comment or did not respond to requests for comment. The industry sources asked not to be identified because the regulatory discussions are private.
Scale of unused lines and background to the charge
Federal Deposit Insurance Corporation figures show there was nearly $5 trillion in unused credit card lines at the end of 2025, though it is not immediately clear how much of that pool would be subject to the new charge under the proposal. The origin of the unused-line charge traces back to the Basel Committee, which first proposed it and which was folded into a 2023 plan drafted by Democratic officials at the Fed and other U.S. banking regulators.
Banks successfully secured delays and revisions to that 2023 draft, and many within the industry had hoped newly appointed Republican regulators would whittle down or remove the unused-lines charge entirely. Several people familiar with the discussions said lenders were disappointed to find the charge remained in the revised language they received, even if other components had been relaxed.
GSIB surcharge remains contentious
Another significant point of dispute is the Fed’s GSIB surcharge, a capital levy placed on large global banks after the 2008 financial crisis. Banks have long urged the Fed to update the parameters used in the surcharge calculation - set in 2015 - to reflect subsequent economic growth and thereby better scale the surcharge relative to the size of banks versus the global economy.
The Fed’s recent proposal included a one-time adjustment to account for recent economic growth and a mechanism for automatic updates going forward. Nevertheless, several banks say they will press regulators to revert to the 2015 inputs in full, a change that industry officials said could materially reduce GSIB surcharges for some lenders. JPMorgan Chase’s public comments last month, including CEO Jamie Dimon’s characterization of parts of the surcharge as "nonsensical" and as a penalty on success, illustrate the level of pushback from the largest firms.
Other technical areas banks plan to challenge include the capital treatment of trading book assets and how the new rules would interact with an institution’s annual supervisory stress tests.
"A lot of banks have said, look, we think that this is a very good starting point ... but there are things in the proposal that they would like to see changed," said Richard Ramsden, who leads financials research at Goldman Sachs. "At this stage, given just how long this debate has gone on for, it makes sense to just focus on getting this done."
Timing and political considerations
Industry officials said banks are eager to secure as many concessions as possible in the coming weeks because they want the final rule set before the November mid-term elections, which could shift political control and produce regulators less receptive to industry requests. Fed Vice Chair for Supervision Michelle Bowman is overseeing the rule-making effort and has said she aims to finalize the proposal by year-end. She has also told banks she does not expect them to reprise the aggressive lobbying tactics used during the 2023 debate and has encouraged focused, targeted feedback on the draft.
Even so, several officials said the industry intends to press hard for relief while they can, mindful that they may not have another near-term opportunity with favorable regulators for an extended period. The Bank Policy Institute, which coordinated much of the industry pushback in 2023, continues to prepare for a substantial comment effort. "It’s an unbelievably complicated proposal," said Greg Baer, the institute’s CEO, remarking on the likely length and complexity of the industry responses.
Where the debate goes from here
Large banks including JPMorgan, Wells Fargo, Citigroup and Bank of America, along with their trade groups, are compiling final wish-lists of technical fixes to submit during the formal feedback period. With regulators indicating they plan to move toward a final rule by the end of the year and with the political calendar compressing the timeframe for change, the coming weeks are likely to determine whether the Fed adopts further modifications that materially alter the capital impacts for individual institutions.
Industry officials say the outcome will be uneven across firms: some may see meaningful relief, others little change, and a few could face higher capital requirements depending on how regulators respond to the technical arguments banks raise.
Reporting for this piece reflected confidential discussions with industry officials and public regulatory proposals disclosed by the Federal Reserve and other official sources.